AMSTERDAM (Reuters) - U.S.-based OriginOil, which has developed ways to harvest algae so it can be used as biomass, will issue licenses for its technology enabling biofuel and chemicals producers to cut carbon emissions, the chief executive said on Friday.

Riggs Eckelberry said that OriginOil plans to offer a licensing system for its technology to extract water from algae -- a key step in algae processing which allows their use in the production of biofuels, plastics or fertilizers.

"The (algae) industry is still too small, so we will start supplying test systems for them (industries) to explore the best use of algae in their production cycle," Eckelberry told Reuters in an interview.

He said he expects the global algae market to increase in size from $271 million in 2010 to $1.6 billion in 2015 as biofuels producers shift from grains to algae. That in turn would reduce pressure on food prices.

He also said that the energy-intensive chemical industry will benefit from the use of algae to produce plastics and fertilizers.

Carbon and other gases released by chemical plants can be liquefied and transported to big water tubes to grow algae which are then used for production of plastics without releasing CO2. Carbon dioxide accounts for more than two-thirds of green house gas emissions.

(Reporting By Ivana Sekularac; Editing by Sara Webb)